Equinix announced last week that it has extended the Platform Equinix into the strategic Indian market, following the completion of the acquisition of the India operations of GPX Global Systems. The US$161 million all-cash transaction includes a fiber-connected campus in Mumbai with two data centers. Equinix India will be led by managing director Manoj Paul, a veteran with more than two decades of experience who will leverage his deep insights into the local data center industry to support the digital transformation journeys of businesses in India. In an interview with Dataquest, Paul gives us important insights on the road ahead for the combined entity.
DQ: Why has Equinix decided to invest in GPX Data Centre?
Manoj Paul: India has been a key market for expansion for Equinix, proving to be one of the top request from global customers across ecosystems. It emerged as the world’s sixth-largest economy in 2020. According to Synergy Research, the data center market in India is expected to grow at 15% compound annual growth rate (CAGR) from 2020-2025, the second-highest rate in the world; and exceed US$2 billion in 2025. The analyst firm also predicts that the country will become the eighth-largest data center market in the world in 2021. India has immense opportunity for continued penetration of internet infrastructure and a focus on accelerating cloud adoption.
Acquiring GPX Data Centers as our first step into the Indian market provides us with a footprint based on two highly interconnected data centers in Mumbai which have become the de facto interconnection sites in India for carriers, content delivery networks (CDNs), content providers, networks and cloud service providers. These data centers provide customers with secure and reliable services to colocate their mission-critical business infrastructure.
This move supports Equinix’s ongoing global expansion, strengthening our leadership position in the Asia-Pacific region, and presents opportunities to expand into new metros and market segments in the Indian market. After the acquisition completion, Equinix now operates 49 IBX data centers in Asia-Pacific across 13 metros in Australia, China, Hong Kong, India, Japan, Korea and Singapore.
DQ: How about technology fitment and what are the solutions of the companies that complement each other?
Manoj Paul: As the world’s digital infrastructure company, Equinix operates more than 230 International Business Exchange (IBX) data centers in 65 metros across 27 countries. With Equinix, companies can rapidly scale their infrastructure, easily adopt hybrid multicloud architectures, effectively increase performance and security by interconnecting directly and privately with more than 10,000 companies, including some 1,800 networks and 3,000 cloud and IT service providers.
As a leader of peering and cloud ecosystems in Mumbai, GPX India was the ideal launch pad for Equinix’s pan-India aspirations. Our first step into the Indian market provides us with a footprint of two highly interconnected data centers, in the most important market of Mumbai, a city which hosts 46% of India’s DC capacity and over 70% of growth in last 2 years, which have become the de facto interconnection sites in India for carriers, content delivery networks (CDNs), content providers, and network and cloud service providers. GPX India’s high-quality data centers provide customers with secure and reliable services to colocate their mission-critical business infrastructure.
GPX India has created a network-dense and interconnection-rich retail colocation business in Mumbai, made up of more than 350 customers, including international brands and local companies. It is home to its own cloud ecosystem, offering a cloud-dense environment with on-ramps to major cloud services, including AWS Direct Connect, Google Cloud Dedicated Interconnect, and Oracle Cloud Infrastructure FastConnect. Its facilities also host key internet exchanges, namely AMSIX India, Extreme IX, Mumbai IX-DECIX, National Internet Exchange of India (NIXI) and Bharat IX, allowing networks, content providers and large enterprises to exchange internet traffic inside the two data centers.
This US$161 million acquisition will add more than 1,350 cabinets, with the addition of more than 500 cabinets when the second Mumbai facility is fully built out, and a team of more than 60 employees. We selected GPX India in part due to its strategic alignment with our value proposition. We expect this acquisition will enable us to meaningfully and quickly grow our ecosystem in India.
DQ: What is the roadmap of these combined entities?
Manoj Paul: From the acquisition, the two new International Business Exchange (IBX) data centers in Mumbai, dubbed Equinix MB1 and MB2, form a network-dense data center campus with more than 350 international brands and local companies, including the world’s leading cloud service providers (CSPs), global networks, content delivery network (CDN) providers, all local carriers, 170 internet service providers (ISPs) and five internet exchanges.
Equinix plans to introduce a full range of interconnection and digital infrastructure services, including Equinix Connect, Equinix Internet Exchange, Metro Connect, Equinix Fabric and Network Edge in the new data centers upon the completion of the business integration. During the integration, Equinix will harmonize GPX India’s products to ensure we provide a consistent service offering, service level and customer experience.
DQ: What is the edge that you offer over other competitors?
Manoj Paul: For our customers to truly deliver value, they need the creation of and access to an ecosystem consisting of network companies, cloud and system integrator companies, and enterprise customers who can take advantage of a full-platform service across a global footprint. Equinix provides customers with access to more than 1,800 networks and 3,000 cloud, IT and system integrator services globally. This strategic expansion will help address the rising demand for carrier-neutral, network-dense data center services from companies in India.
Scale and reach are key for our customers. Currently, we have more than 230 data centers across 65 metros and 27 countries. Along with established ecosystems and a reliable interconnection solutions portfolio, the expanded Platform Equinix will provide significant opportunities for organizations to continue their digital transformation in India and move their IT infrastructure, applications and services closer to the digital edge in proximity to customers and partners.
India’s data center landscape currently lacks a global player that is focused on interconnection ecosystems and hyperscale. We believe with our global footprint, vast ecosystem and interconnection proposition, combined with the two interconnected data centers in India acquired, we have a strong differentiation and competitive edge in the Indian market.
DQ: What are the verticals that you are focusing on?
Manoj Paul: The Indian market includes a wide range of vertical industries, including a large share of high-tech/cutting-edge digital enterprises with complex requirements (Finance, Network, Cloud and Content). These companies will benefit from the expanded availability of direct physical and virtual interconnections from Equinix, which deliver more reliable and secure performance. The India market will have unmatched global interconnectivity to other businesses, stock exchanges, networks, service providers which will enable delivery of more robust and innovative digital services and experiences to their target audiences by leveraging Platform Equinix.
DQ: How do you plan to address the challenges posed by the COVID-19 pandemic?
Manoj Paul: COVID has brought in challenges in 24x7x365 operations of a Data Center. However, in spite of severe challenges over the last over one year, the Equinix India team has been able to devise methods and processes and has ensured smooth operations of the data centers and capability to provide enhanced services to customers many of whom are not able to visit the data centers and are dependent on support from the India team present in the DC. COVID has also opened up a great opportunity for us. According to IDC’s COVID-19 Impact on IT spending Survey, May 2020, as a result of the spread of the pandemic, 64% of the organizations in India are expected to increase demand for cloud computing, while 56% for cloud software to support the new normal. Furthermore, IDC’s latest predictions forecast that by 2024, over 50% of enterprises in India will replace outdated operational models with cloud-centric models that facilitate rather than inhibit organizational collaboration, resulting in better business outcomes. With the acquisition of GPX India, we expect to be in a strong position to respond to the increasing demand from existing network, content, cloud and enterprise customers looking to expand in this rapidly growing market.